Delaware PSC Staff: Need for Nonbypassable Charge for SOS Wind Contracts No Longer a Concern for Near Future

The potential need for a nonbypassable charge on customers at Delmarva Power in Delaware, to recover costs of long-term wind PPAs used to supply the SOS portfolio, has not materialized, and Delaware PSC Staff no longer consider impacts from customer migration to be an issue in the near future, the PSC reported in a recent order.

In 2008, the PSC approved Delmarva's proposal to, consistent with legislation, enter three PPAs for the collective procurement of 170 MW of land-based wind power, with such power included in the SOS portfolio.

At that time, to alleviate the concerns regarding migration of Delmarva's SOS customers, the Commission directed the Commission Staff to report, on a quarterly basis, customer migration away from Delmarva's SOS classes. The Commission also reserved the right to implement a nonbypassable surcharge, pursuant to 26 Del. C. §1010, if any of the PPAs carried above-market costs and the SOS classes experienced significant migration.

Staff reported in a recent memo to the Commission that no remarkable changes in the migration data have occurred. "Staff further notes that while the trend since 2009 has been a slight increase in the number of residential customers supplied by TPS [retail suppliers], such increase was not as significant, overall, as Staff had anticipated."

Accordingly, as stated by the Commission, Staff, "believes that the initial concerns regarding customer migration away from Delmarva's SOS classes -- and the allocation of the costs and benefits of the PPAs -- are no longer issues in the near future."

The PSC directed Staff to continue to monitor migration at Delmarva, but ended the recurring reporting requirement to Commissioners, unless Staff identifies significant changes in customer migration.

Additionally, the PSC closed Docket No. 08-205, which had housed consideration and cost recovery of the wind PPAs.